STAY SHORT WITH THE STOP-LOSS OF 17400

 STAY SHORT WITH THE STOP-LOSS OF 17400

 

WORLD MARKETS

 

US indices nosedived 2.2%-2.5% as the World Health Organization labeled the omicron Covid strain a “variant of concern.” The Dow posted its worst day since October 2020

 

The variant was first reported to the WHO from South Africa and has been found in the U.K., Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong, but not yet in the U.S. Many countries, including the U.S., moved to restrict travel from southern Africa.

 

US 10-year treasury yield dropped by more than 15 bps to 1.485%. Dollar index fell 0.74% to 96.07. Gold, after spiking to $1815, eased to end 0.2% higher at $1791 per ounce.

 

U.S. oil settled 13.1%, or $10.24, lower at $68.15 per barrel for its worst day since April 2020.  Brent crude futures slid 11.6% to settle at $72.72 per barrel.

 

European markets tumbled 3.6%-4.8%

 

For the week, US indices fell 2%-3.5% with Nasdaq leading the losses. Brent and WTI fell nearly 7% and 10% respectively for their fifth straight week of losses.

 

AT HOME

 

Benchmark indices nosedived 3%, suffering the worst fall since 12th April and closing at the lowest level since 30 august 2021. Sensex settled at 57107, down 1688 points while Nifty lost 510 points to finish at 17026. Nifty mid-cap and small-cap indices plunged 3.2% and 2.9% respectively. Except 1.2% higher Healthcare index, all the BSE sectoral indices ended in red, with Realty and Metal indices leading the losses, down 6.4% and 5.4% respectively.

 

FIIs net sold stocks and index futures worth Rs 5786 cr and 3271 cr respectively but net bought stock futures worth Rs 530 cr. DIIs were net buyers to the tune of Rs 2294 cr.

 

Rupee depreciated 36 paise to end at 74.87/$.

 

For the week, Sensex and Nifty tumbled 4.2% each, which is the worst weekly cut in 10 months.

 

OUTLOOK

 

Today morning, Shanghai and Nikkei are down 0.5% and 0.3% respectively while Hang Seng is marginally higher. SGX Nifty is suggesting around 30 points higher start for our market.

 

In Friday's report we had said that 17216, the low made Tuesday, continued to be important immediate support and had advised holding on to short positions with the stop-loss of 17850.

 

Nifty broke 17216 and plunged all the way to 16985 before closing at 17026.

 

16800-16850 is the next support zone, below which, 16600, which is the target of bearish Head & Shoulder formation breakdown, would be the next level to eye. 17400 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 200-DMA, placed around 35700, is the important immediate support to eye. If this